Obama Claiming Credit for Energy Gains Angers Industry Foes

American energy will be a major theme of Obama’s State of the Union address to Congress tonight, Jay Carney, the White House spokesman, said in a briefing yesterday. In his first campaign ad this year, Obama boasts that U.S. dependence on foreign oil is below 50 percent for the first time in 13 years. Photo: Matthew Staver/Bloomberg

Jan. 24 (Bloomberg) -- President Barack Obama is taking
credit for higher U.S. oil and gas production and lower imports,
angering industry groups and Republicans who say he is working
against domestic energy production.

American energy will be a major theme of Obama’s State of
the Union address to Congress tonight, Jay Carney, the White
House spokesman, said in a briefing yesterday. In his first
campaign ad this year, Obama boasts that U.S. dependence on
foreign oil is below 50 percent for the first time in 13 years.

Since Obama took office, U.S. natural gas production
averaged 1.89 trillion cubic feet a month through October, 13
percent higher than the average during President George W.
Bush’s two terms, according to Energy Department data. Crude oil
production is 2 percent higher, the department said.

“To be sure that is not because the White House meant for
that to happen,” said Pavel Molchanov, an analyst at Raymond
James & Associates Inc.

Republicans say the numbers are misleading. Onshore oil and
gas production on federal lands directly under Obama’s control
is down 40 percent compared to 10 years ago, according to
Spencer Pederson, a spokesman for Representative Doc Hastings, a
Washington Republican and chairman of the House Natural
Resources Committee. In 2010, the U.S. signed the fewest number
of offshore drilling leases since 1984.

‘Drill Baby Drill’

“The president is responding to what America’s gut feeling
is, that we should be less dependent on foreign oil, and he’s
trying to take credit for it,” Hastings said in an interview.
“His policies are exactly the opposite.”

Four years ago, Obama campaigned against Republican vice
presidential nominee Sarah Palin’s rally to “Drill Baby
Drill.” Today he is highlighting fossil fuel gains to blunt
charges that his policies are contributing to higher energy
costs, according to Tyson Slocum, energy program director for
Public Citizen, a Washington-based consumer advocacy group, said
in an interview.

“The Republican narrative is that Obama is shoveling huge
amounts of money to his cronies in the renewable industry, and
blocking the real energy that American needs,” Slocum said in
an interview. “It’s a false narrative. The administration has
been focused on green energy, but they haven’t been against
fossil fuels.”

Federal Leases

In a January report, the American Petroleum Institute in
Washington said that in two years the number of new leases to
drill on federal lands declined 44 percent to 1,053 in 2010. The
report blamed “new rules, policies and administrative actions
that are not conducive to oil and natural gas production.”

Lower imports are the result of lower demand, and
increasing production has come despite Obama’s policies,
according to Jack Gerard, American Petroleum Institute
President. The U.S. needs a “course correction” on energy
policy that includes faster permitting on federal lands in the
West and in the Gulf of Mexico, he said.

The group, whose members include Exxon Mobil Corp., the
largest U.S. oil company, convened a conference call with
reporters today to comment on what Obama is expected to say on
domestic energy in tonight’s address.

“We hope that the actions match the words,” Gerard said
on the call. “The truth is that the administration has
sometimes paid lip service to more domestic energy development,
including more oil and natural gas development.”

Offshore Drilling

The American Enterprise Institute, a Washington group that
supports free markets, called Obama’s Jan. 18 decision to deny a
permit for TransCanada Corp.’s $7 billion Keystone XL oil
pipeline, part of his “crusade against fossil fuels.”

“The losses due to the Obama administration’s death-grip
on offshore drilling and its unwillingness to open federal lands
or issue timely permits for exploration far outweigh any energy
gains that the White House may tout this week,” Thomas Pyle,
president of the Washington-based Institute for Energy Research,
said in a statement.

Obama last year called on Congress to eliminate “billions
in taxpayer” subsidies for oil companies and to invest instead
in renewable sources of power. In 2010, he proposed drilling for
oil and natural gas off the U.S. East Coast, weeks before BP
Plc’s Macondo well in the Gulf of Mexico failed, spewing 4.9
million barrels of oil and triggering a temporary administration
ban on offshore exploration.

Oil Production

Higher production of oil, gas and renewable fuels will
reduce the share of net imports in total U.S. energy consumption
to 13 percent by 2035 from 22 percent in 2010, the Energy
Department said yesterday.

Much of the growth has come from North Dakota, where oil
producers have spurred a fivefold increase in output by using
intensive drilling practices in the Bakken, a geologic formation
that stretches from southern Alberta to the northern U.S. Great
Plains.

“If you’re in the White House when it happens, you should
get the credit or the blame for it,” Joshua Freed, vice
president for clean energy for Third Way, a Washington-based
group that says it advocates policies that appeal to the
political center, said in an interview.

U.S. oil production increased to 5.5 million barrels a day
in 2010 from 5.1 million in 2007, according to the Energy
Department. Over the next 10 years, gains in oil-shale and Gulf
of Mexico output will lift domestic production to 6.7 million
barrels a day, a level not seen since 1994.